U.S. Court Rulings May Permit Holders of Recently Issued Patents to Request Additional Term

November 19, 2012

When Congress altered the law governing the term of U.S. patents (from 17 years from patent issuance to 20 years from the effective filing date of the patent application), Congress also enacted a patent term adjustment (PTA) statute that would extend the term of patents as a result of certain examination delays attributed the U.S. Patent and Trademark Office (USPTO). PTA can be especially important and valuable in industries with long product development cycles, such as biotechnology and pharmaceuticals, because the commercial value of patents in such circumstances may be greatest at the end of the patent’s term.

The USPTO calculates PTA for every patent at the time of allowance, and again at the time of issuance. Patentees have opportunities to challenge the correctness of this determination with the USPTO, and also one opportunity to challenge the USPTO’s determination in federal district court.

On November 1, in Exelixis, Inc. v. Kappos (Case No. 1:12cv96), the District Court for the Eastern District of Virginia held that the USPTO’s rules for calculating PTA were based on an incorrect reading of the PTA statute, and that the patentee was entitled to additional PTA. The particular facts of Exelixis involve the proper calculation of PTA for patents that (1) were pending for more than three years and (b) involved the filing of a first Request for Continued Examination (RCE) by the applicant more than three years into prosecution. Because this decision was based on allegedly faulty calculation rules, the decision could impact the term of many other recently issued patents, if challenges are timely filed.

On November 15, in Novartis v. Kappos (Civil Action No. 10-cv-1138), on materially similar facts, the District Court for the District of Columbia followed the reasoning in Exelixis and held in favor of another patentee seeking additional PTA.

It is possible that the USPTO will appeal the Exelixis and Novartis District Court rulings. However, the time limits for patentees to challenge PTA under the PTO’s rules (60 days from issuance, for the type of PTA at issue inExelixis) and under the PTA statute (180 days from issuance) may be unforgiving of patentees who passively await the conclusion of the Exelixis and Novartis litigations to decide whether to challenge a PTA determination with respect to a recently issued patent. Accordingly, patent owners who may benefit from PTA have reason to promptly review their patent portfolios to determine if Exelixis and Novartis impact patent term, on a case-by-case basis, and take action within deadlines set forth under the rules and statute.

Please contact the author or another trusted attorney at Marshall, Gerstein & Borun LLP if you would like more information or assistance.

The information contained in this alert is for informational purposes only and is not legal advice or a substitute for obtaining legal advice. Under applicable rules of professional conduct, this communication may constitute Attorney Advertising. © 2012 MARSHALL, GERSTEIN & BORUN LLP, Chicago, Illinois. All rights reserved.

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